Why The U.s. Must Protect Its Uranium Enrichment Edge

August 31, 1990|By Walter J. McCarthy Jr.

This country pioneered the development of nuclear energy nearly a half-century ago. But in 1990 the appalling fact is that America`s nuclear fuels industry is sliding toward financial collapse. The Soviet Union and European companies are poised to divide between them the vast American market for enriched uranium.

To the peril of our defense and energy security, America`s grasp of uranium enrichment technology is slipping dangerously. In fact, the U.S. Department of Energy recently disclosed it is considering buying enriched uranium from the Soviet Union to supply its customers-nuclear power plants and the Navy-because it costs less to buy enriched uranium from foreign suppliers than to produce it at the department`s own aging facilities.

The future of Energy Department enrichment capability is so uncertain that at least 12 major electric utilities-including the Tennessee Valley Authority and Commonwealth Edison in Chicago, the nation`s largest nuclear utility-have notified the department that they intend to look elsewhere for enrichment services as soon as their current contracts allow. They are inviting suppliers other than the Energy Department to bid on providing enriched uranium for their nuclear power plants.

Even now, the sharp decline in the U.S. share of the uranium enrichment market has exacted a heavy price in lost jobs, lost income for the government and sharply higher costs to taxpayers for enriched uranium to support the 40 percent of our Navy that is nuclear-powered.

President Bush is supporting legislation to rescue the Energy Department`s uranium enrichment enterprise by placing it under control of a new government-owned corporation. Congress has few more pertinent tasks than to stem the erosion of America`s pre-eminence in uranium enrichment technology.

The principal damage has been done by the Soviet Union, which began cutting into the multibillion-dollar U.S. market several years ago, selling its uranium enrichment services at less than half the prices charged by the Energy Department. So far the Soviet Union and competitors in Western Europe have taken away 45 percent of the department`s foreign enrichment business and at least 10 percent of its domestic business-resulting in contract terminations with a sales value of $5 billion. The significance of this loss cannot be overstated.

Along with other nuclear industry leaders, I visited the Soviet Union last year to learn more about that country`s nuclear power program. Despite the Chernobyl accident and serious problems with their economy, the Soviets are proceeding with the development of nuclear power. And it appears they are profiting enormously by dumping cheap enriched uranium on the world market to generate hard currency.

All those who have studied the situation agree that U.S. dominance in the uranium enrichment market will collapse before the decade is out as a result of underpricing by lower-cost competitors. If that happens, we will be giving away our competitive edge in still another vital industry-and drastically increasing our defense enrichment costs in the process.

Congress has an opportunity to rescue this vital industry. The Senate has approved legislation to remove the uranium enrichment enterprise from the Department of Energy and place it under the control of a new government-owned U.S. Enrichment Corp. With the authority to set its own prices for enriched uranium, the corporation could respond to market forces and keep pace with foreign competitors. And the corporation would be free of those administrative and financial controls that constrain the operational efficiency and financial flexibility of a government agency.

If the United States is to maintain its uranium enrichment capability, the House must address this situation promptly. Otherwise, the Senate-approved bill will die-and along with it, prospects for preserving a secure domestic supply of resources essential to our national defense and energy security.